By Howard Fischer
Capitol Media Services
SCOTTSDALE — Elijah Norton wants to bar the treasurer's office from buying the stocks and bonds of companies he believes are guilty of "discrimination.''
But what the Republican who is running to head that office said that even includes companies that have diversity, equity, and inclusion policies.
The discussion came during a half-hour debate Wednesday night which focused on the claims by Norton and Nick Mansour, his Democratic foe, about who is more qualified to oversee then $33 billion being managed by the state treasurer. And that included what is the best way to protect the funds while increasing the yield.
But Norton drew questions because he has said the state should invest in companies that provide a good service and make a profit, "not engage in political activism or racial activism.''
"What I've said is I don't want to invest in companies that engage in racially motivated hiring practices,'' he said.
"This is a real thing,'' Norton said. "Starbucks was sued by the Florida attorney general for having racial hiring quotas.''
In that case, the company was charged that its diversity, equity, and inclusion policies violated the state's Civil Rights Act by illegally factoring race and sex into the company's hiring practices. Starbucks agreed to pay $1 million to settle the case. But its attorney said there was no admission of liability or wrongdoing, and that there would not be any changes to current programs or practices.
Norton said Arizona is a diverse state.
"And I don't think the people of Arizona want their money invested in companies that have racial hiring quotas,'' he said.
Mansour said he agrees with the general principle that the state should not be supporting discrimination. But he said what Norton is proposing goes beyond that.
"As much as possible, we should not inject partisan political issues into how we manage these funds,'' Mansour said.
He said that, using Norton's test, that would preclude Arizona from putting its funds into any company with DEI practices. And that, said Mansour, would keep the treasurer's office from investing in more than 400 of the Fortune 500 companies, leaving fewer options.
"It will increase risk and it will result in bad returns,'' he said.
That figure may not be accurate.
The Human Rights Campaign said 377 Fortune 500 companies publicly disclosed their DEI practices in 2025. But by this year that had fallen to just 131.
Norton, using a different metric, said his proposal would only preclude investment into about 8% of some 4,000 publicly traded companies. And he said there are no Arizona companies that would be off-limits to state investment.
Still, Norton said that, as he sees it, companies with DEI policies — including how they decide who to hire and promote — would be off-limits to state investment if he were treasurer. He said such policies are unnecessary.
Mansour, however, said there should be "very few exceptions'' to the practice of the treasurer to invest funds where they are safe and can get the best yield, regardless of whether they have DEI policies.
"I'm not saying that there shouldn't be any,'' he said.
"But it should be rare,'' Mansour continued. "It should be decided by the Legislature and the governor together. It shouldn't be at the whim of the treasurer.''
And he said it should not include a refusal to invest in any company with a DEI policy.
"That's just a really bad fiscal decision,'' he said. "It will make our investments riskier.''
There actually already is precedent for making some companies off-limits for state investments.
In 2021, Kimberly Yee, the current state treasurer, announced she was selling off the state's $143 million it held in bonds and commercial paper for Unilever.
That followed the company's announcement that it will not longer sell its Ben & Jerry's ice cream in the West Bank and and the contested eastern Jerusalem, all of which Israel claims as its capital. Unilever had acquired the company in 2000.
But that decision was not hers.
Yee cited a 2016 law which says that state entities are prohibited from doing business with any company that boycotts Israel. The decision not to sell ice cream in the Palestinian territories occupied by Israel, she said, triggered that law.
Beyond politics and DEI, the big difference between the two candidates was how best to invest the funds — particularly the $11 billion in the Permanent Land Endowment Trust Fund which is used as the basis for providing funds for public schools.
Norton said current policy is to invest 60% of available funds in stocks and 40% in bonds.
"And there's a reason for that,'' he said.
In general, when there is strong corporate growth, investors buy stocks and push prices higher. But when investors fear a recession, they move their money to generally safer corporate bonds, raising their prices.
"When the stock market goes down, the bond market serves as a security to ensure that the state does not suffer big losses,'' Norton said.
Mansour, however, said that has proven to be too conservative.
"We have lost out on $3.6 billion over the last 13 years,'' he said. "Instead of being $11 billion, this could be $15 billion today.''
His preference would be to move at least 70% of state funds into stocks — and possibly as much as 80%.
"This is a fund for education,'' he said
"I am a parent,'' Mansour said. "This is a way to invest for the long term to make more money for our kids and to keep our taxes low.''
Norton said the numbers work only if the market keeps rising. The flip side is if the market goes the other way.
"The market's at record highs and it could happen any day,'' he said.
"We could lose $1 billion to $2 billion over 10 years,'' Norton said. "This is not a risky strategy that Arizona can afford.''
The two candidates also traded barbs over their business practices and whether they should be trusted to manage the state's money.
Mansour said that Norton's firm which sells vehicle service contracts and extended auto warranties, now known as Veritas Global Protection, has been the subject of numerous complaints and lawsuits over its business practices. He said that includes everything from robocalls to not paying up when customers file claims.
Norton said those instances amount to no more than "a tenth of a tenth of a percent'' of its $500 million a year business.
And Norton, in turn, said the privately run Arizona College of Nursing which Mansour chaired, has had to agreed to settlements to end complaints about its practices. Mansour said there were only four lawsuits over his 14 years with the college.
Mansour also noted that Yee, a now running for state schools chief, has not endorsed fellow Republican Norton in the election. In fact, Yee actually recruited Katherine Haley to run against him — unsuccessfully — in the GOP primary.
